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The manufacturing sector in China moved into expansion territory in October, the latest survey from Caixin showed on Monday with a manufacturing PMI score of 50.6.

That’s up from 50.0 in September and it moves out of stagnation and above the boom-or-bust line of 50 that separates expansion from contraction.

Stronger demand conditions helped to lift the headline PMI, with total new orders rising to the greatest extent in four months. Panel members often mentioned that client demand had improved over the month. However, underlying data indicated that the upturn was largely driven by stronger domestic demand, as foreign orders fell for the third month in a row. Some manufacturers mentioned that difficulties securing sales and shipping products to overseas clients had weighed on export business.

Despite rising amounts of overall new work, manufacturers recorded a third successive monthly decline in production, albeit one that was only mild. Panel members often indicated that limited power supply, material shortages and rising costs had constrained output at the start of the fourth quarter.


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